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Saturday, December 12, 2009

I was just astounded by this story in today's paper about a woman suing her lender and others because she's in a house she cannot afford.

First, she's not a victim, despite the way she is portrayed.

She purchased a house for more than it was worth and blames appraisers for valuing the house too high. She cannot afford her payments and blames the bank for giving her the loans when "they knew she lived on a Social Security disability payment and could not afford the payments on loans she was approved for in 2002 and 2006."

According to the article:

"...she's waging a battle against mortgage banking giant HSBC and a string of appraisers and mortgage brokers who she contends took advantage of her lack of experience in real estate to saddle her with huge loans."

Excuse me????

The banks didn't saddle her with huge loans - she did that when she signed the paperwork.

Here are the questions I want her to answer - questions not even remotely addressed in the article:

1. What was the asking price of the house when you bought it and what price did you settle on?

2. Did you compare the sale price of the house to other homes in the area? Did YOU research the value of the house and surrounding homes on the Auditor's website? Did YOU question why the house was for sale for so much more than the value? Did you hire your own appraiser or did you just rely upon the ones selected by the mortgage company/bank?

3. If you paid $55,000 for the house, why do you now have a mortgage of $88,000? Why did you take out loans for more than the purchase price of the house and how did you spend that additional money?

4. If the bank was supposed to know that you couldn't afford the payments on the loan you were taking out, why didn't YOU????

5. Why did you sign loan papers for a mortgage that was higher than what you could afford?

6. Why do you have two loans? If you were having trouble with the first one, why did you take out a second one?

7. Why are your errors now a problem for the other party in the transaction?

8. What were your responsibilities in the transaction? Aren't YOU to blame for your situation - after all, it's not like someone held a gun to your head and forced you to take out a loan to buy a house.

9. Where do you currently work and how many jobs do you have? If you have financial obligations, what are you doing to meet them?

These are the things I want to know. Don't you? There are too many people these days who'd rather play the victim than take responsibility for themselves, their actions and their mistakes.

And then she plays the race card, saying all this is because she's an African-American woman. Of course, there are plenty of white people who are in similar situations - they purchased homes/took out mortgages they knew they couldn't afford and are now in a difficult situation - facing foreclosure or bankruptcy or both.

This is not to say that I don't have compassion for a woman who is trying to care for her children, but my compassion for her current situation does not negate the need for her to take responsibility for how she ended up there.

Suing everyone because she made massive mistakes in purchasing her house is not taking responsibility. She's trying to make herself into a victim, when she's the one to blame. And there are too many people and organizations who are standing by to help her in this regard.

That's what sets me off when it comes to these types of situations, which are just too numerous these days: people who refuse to admit their own ignorance or stupidity put them into a difficult situation and that it's no one else's fault by their own that they were ignorant or stupid.

From The Blade: Ms. Price claims in her lawsuit that she was targeted as an African-American and that her home was targeted because it is in a predominantly African-American census tract.

How are they going to label this one? Anti-redlining? This complaint goes over the top. It was complaints about racial discrimination that helped to start this entire mortgage crisis.

The woman paid $55,000 for an item valued at $15,000. Her mortgage is $88,000. My question is this: Where did the money go?

It occurs to me she might have made a deal with the seller. Price could have made an easy $10,000 under the table, plus any additional cash for a second mortgage. At the end of the day she's supposed to file bankruptcy, but now the political climate is such that Price may get herself a free house. Hence the lawsuit.

Price is also running a ministry out of her home, so I'm wondering what that does for her as far as taxes go. If the building is exempt from property tax that's another few grand in the till.

Maggie, you will never get to work for the daily paper (not that you would want to in the first place). You ask too many questions that all of us who read the story would want to ask. You'd leave out all the race card and feel-good liberalism that is so endemic through their stories. Excellent post on this story.

Sadly, these excuses happen all the time in the industry. There is a sense of entitlement that pervades our society. Somewhere along the line, people have come to believe that they are entitled to their house (or housing in general). They believe with every ounce of their being that if they cannot afford it, well then, someone should just give it to them. That lenders should be responsible for giving them the best loan possible, and governments should bail them out when they can't make their payments. These people don't want to work, let alone do any research when purchasing their home. They would prefer to use ignorance as an excuse.